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Crude oil slumps
A correction of some sort in crude oil prices seemed inevitable and this may well have started today with both contracts falling nearly 4% each.
Crude steady as DoE oil stocks build lower than API estimate
Crude oil prices have been on a roller-coaster ride to absolutely nowhere in recent weeks. It appears as though the buying and selling pressure in finely balanced. Bullish speculators are encouraged to remain in the game because of the OPEC’s efforts to reduce supply. Bearish traders are encouraged by signs of renewed rise in oil production in the US.
WTI crude drops to $40 as oil stocks jump
WTI crude oil fell on the back of data from the US Department of Energy which showed US oil stockpiles rose by a sharp 9.4 million barrels last week. This more or less confirmed the data that was released by the American Petroleum Institute (API) the night before, but it still disappointed the expectations of a much smaller build. However crude stocks at Cushing fell, while gasoline inventories declined by a sharp 4.6 million barrels. So it wasn’t as bad a report as the headline figure made it out to be. Stockpiles have been rising relentlessly despite signs of lower oil output in recent months. But it should be noted that during this time of the year when refineries carry out their maintenance works ahead of the driving season, inventories do tend to rise. Thus, the build is not too much of a surprise. US oil inventories should begin to fall once the driving season starts, while the potential deal between Russia and the OPEC to freeze oil production should also help to reduce the imbalance between demand and supply in the oil market. For that reason, I don’t expect this to be the start of another major downward trend.
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